macnn/ipodnn
06/11/2008, 4:30pm, EDT
Wednesday, June 11th
Piper: App Store could become $1 billion market
The App Store could prove potentially lucrative to the software industry, says the Piper Jaffray research group in part of its ongoing WWDC analysis. The firm suggests that the App Store could reach a userbase of some 78 million people by the end of 2009, a figure reached by combining iPhone and iPod touch visitors, and assuming an active Store userbase of 91 percent. Piper notes that while this may be optimistic, Apple claims that 98 percent of iPhone owners already browse the web, while 94 percent access e-mail.
To calculate possible revenue, Piper is remaining with its $10 per-customer/per-year figure, though it believes this is a conservative estimate. If numbers exceeds this the App Store could generate $1 billion by the end of 2009, although Apple itself would still only take home 30 percent, and its operating margins could be as much as 60 percent. Since it intends to distribute free software as well, the company may likely run "just above break even" on the App Store, as it has previously indicated.
Filed under: iPod, iPhone, Investor, industry, Apple
Other story tags: iPhone 3G, iPod touch, App Store
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$15
That is about $15 per user per year, as a gaming platform it can be higher. 78 million in 2 years is a bit steep.
iPod touch users too
I could see that number with iphone ipod touch users. Remember as well that with the student discount almost every student buying a mac will be getting a touch as well.
And who cares if they break even at the App store. The real money comes from the number of ipods/iphones they sell, not to mention all the new customers to apple products. They will make bank on this.
2009 Year of Linux Phones
By 2009, Apple's iPhone will be under pretty significant pressure from Google's Android platform (and possibly Linux Mobile) to release some control over the iPhone. Apple will not be able to afford to keep this level of control over their platform for that much longer, or they will be marginalized all over again (Mac vs. PC take two). As credible competitors come on the market, Apple will have no choice but to release their grip or face irrelevance again. Apple's done a tremendous job designing their iPhone and its OS, and they have a several-year head start, but they can't fight their own users for too much longer once those users start to have some real options available.
What guarantee do
you have that the Android OS is going to be so fantastic? Saying it's gonna be good doesn't really mean all that much, does it. It might turn out to be a mobile Vista for all we know. Once the iPhone gets entrenched, I think it will be fairly difficult to steal market share from it.
Almost Pure Profit...
I definitely think the "App Store" will be a large cash cow for Apple. Things to point out:
1. Apple gets 30% off the top; that's much more than what the grubby media giants are giving the company.
2. The infrastructure for distribution was 75% there already. It's not like they're starting from scratch.
3. Everyone who has an iPhone is likely to buy at least one application (not to mention iPod Touch owners). I mean, for me at least, Super Monkey Ball is a dead lock. So, that's $10 right a launch. Can't imagine what my tab will be at the end of 2008.
4. Apple has only currently admitted 4,000 developers in the beta program out of 25,000. If only a tenth of those make sellable software, that's 2,000 additional apps. This thing is going to mushroom rapidly.
I wonder...
if Apple has plans using App Store, iPhone and iPod Touch in promoting m-Learning (mobile learning).
Business users
Professional users could easily skew that app store usage/customer to the high side. Just the two medical applications I used on the Treo are updated annually, and I could easily spend $200 a year in the App Store just for those two, even before I start buying games.
in reality
I think you just need to look at a site like www.handango.com which has been selling Windows Mobile games for years to see what kind of revenue can be earned through mobile phone software sales. Of course, the seamless integration of the App Store will increase sales by at least some percentage but I highly doubt $1 billion/yr anytime soon.
How are people so stupid
I feel like I'm taking Crazy Pills here...
Am I the only one that sees that the App Store is to the iPhone like the iTunes store is to the iPod????? They may make some money on apps, but the intent is to SELL IPHONES!
Successful App store = iPhones selling.
No wonder the competition never keeps up. Apple could publish a book on what to do and why and the world would still not understand.